EIB chief criticises handling of O'Flaherty nomination

The president of the European Investment Bank has implicitly criticised the way the Government handled the aborted nomination…

The president of the European Investment Bank has implicitly criticised the way the Government handled the aborted nomination of Mr Hugh O'Flaherty as vice-president of the bank.

In a letter to the Taoiseach Mr Philippe Maystadt pointedly noted "that I will soon be consulted on a new candidate before a formal proposal is sent to the bank". Mr Maystadt was not consulted before Mr O'Flaherty was proposed.

He also drew attention to the need to appoint somebody with qualifications and experience relevant to the bank.

Mr Maystadt's letter was sent to Mr Ahern on August 30th, shortly after the withdrawal of Mr O'Flaherty's candidature for the position of EIB vice-president after four months of controversy. While the bank president never stated a view of the merits of the nomination, the opposition of senior bank figures and a number of directors ultimately led to its withdrawal.

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Mr Maystadt is considered likely to have shared the concerns that such a controversial nomination was made without advance warning. The bank was deeply uncomfortable with the subsequent publicity as well as the highlighting of the fact that Mr O'Flaherty had no direct banking experience.

Mr Maystadt's letter reflected these concerns, pointing out that "close consultation is indeed one of the suggestions made by the directors in the context of a package of proposals to improve the governance of the EIB".

Pointing to his wish that any new nominee would have the necessary experience he said: "I am sure you will appreciate that I will seek to ensure that the qualifications and experience of vice-presidents are such that the Management Committee as a body will continue to have all the necessary competences to carry out its tasks and functions under the bank's statute."

This statement of his role and responsibility in the matter contrasts with the Government's initial position that it was the Government that effectively decided who got the job.

Mr Maystadt told Mr Ahern he would be happy to talk to him about this, and said he was "indeed very sorry about the difficulties which this matter must have caused all those involved". The letter was released to The Irish Times yesterday under the Freedom of Information Act.

The Government ultimately put forward Mr Michael Tutty, Second Secretary at the Department of Finance, as its candidate for the position. The bank's directors are expected to approve this nomination by postal voting within a few days, with the board of governors - the EU Finance and Economic Ministers - to ratify the nomination next month. The bank is understood to see the nomination as entirely uncontentious and meeting its requirements.